Press release from CNW Group
Algoma Central Corporation announces collection of refund guarantees on cancelled ocean tanker contracts
Monday, December 30, 2013
Algoma Central Corporation announces collection of refund guarantees on cancelled ocean tanker contracts10:12 EST Monday, December 30, 2013
ST. CATHARINES, ON, Dec. 30, 2013 /CNW/ - Algoma Central Corporation (Algoma - www.algonet.com) is pleased to announce that it has received payments totalling $41.7 million from two Chinese banks on refund guarantees related to the cancellation of three ocean tanker shipbuilding contracts which occurred in 2010.
"We are extremely pleased to announce the collection of these outstanding instalment refunds," said Greg Wight, President and CEO of Algoma. "The collection process has proceeded smoothly following an arduous arbitration and appeal process that extended over three years from the date we cancelled the contracts. We would like to formally thank the Banks for their actions in closing these files."
In 2007, Algoma, through its wholly owned subsidiary, entered into contracts to build three 16,500 - deadweight ton product tankers in China. Each contract contained provisions that permitted cancellation under certain conditions. These conditions were met in 2010 and Algoma accordingly issued notices of rescission to the shipyard seeking to cancel the contracts and demanding reimbursement of the instalments that had been advanced. The matter was taken to arbitration by the shipyard and hearings were conducted before a Tribunal in London in September, 2012. The Arbitration Tribunal found in favour of Algoma in all matters in April, 2013 and the shipyard sought leave to appeal. The UK commercial courts rejected the shipyard's application in November and Algoma commenced collection action immediately thereafter.
About Algoma Central Corporation
Algoma Central Corporation owns and operates the largest Canadian flag fleet of dry and liquid bulk carriers operating on the Great Lakes - St. Lawrence Waterway, including 19 self-unloading dry-bulk carriers, seven gearless dry bulk carriers and seven product tankers. Algoma also has interests in ocean dry-bulk and product tanker vessels operating in international markets. Algoma owns a diversified ship repair and steel fabricating facility active in the Great Lakes and St. Lawrence regions of Canada. In addition, Algoma owns and manages commercial real estate properties in Sault Ste. Marie, St. Catharines and Waterloo, Ontario.
A recently published economic impact study, commissioned by Marine Delivers, demonstrates the significant role that the Great Lakes / Seaway system plays in supporting the Canadian and U.S. economies. Some 227,000 jobs and $35 billion in economic activity are supported by the movement of goods within the Great Lakes / St. Lawrence Waterway. For more information, including access to the full text of the economic impact study, please consult the www.marinedelivers.com website.
SOURCE Algoma Central Corporation
For further information:
Greg D. Wight, FCA
President and Chief Executive Officer
Peter D. Winkley, CA
Vice President, Finance and Chief Financial Officer